Why the tax proposals you've heard about
aren't the ones that can work.

Most heavily-promoted tax reform proposals focus on one of five ideas:

Proposal
But...
(1) Make the income tax more “progressive,” meaning that higher-income people pay a larger share of the burden.

But high-income people can pass the increase on to their clients, customers, tenants, or shareholders, not to mention that they can hire lobbyists to carve out loopholes for themselves
(2) Simplify the income tax by removing many special provisions and reducing the number of tax brackets But while this may (or may not) make life easier for high-income people, it does little for the rest of us.
(3) Reduce the tax on investment earnings, because investment creates jobs But the kinds of investments that tax law favors aren’t the kind that create jobs, and the direct benefits always go to the wealthy.
(4) Scrap the income tax entirely, and replace it with a national sales tax, combined with a “rebate” for low-income people But the sales tax rate would have to be at least 64%, which would be a very serious burden and would lead to large-scale evasion.
(5) Instead of a sales tax, use a value-added tax or gross receipts tax. These may be harder to evade. But they require even larger bureaucracies and more forms, and still raise the cost of everything we buy by over 50%.

So is there a tax that avoids these problems? Yes there is, and it’s variously called the “single tax,” “land value tax,” “tax on privilege,” or simply “Georgist tax.” To understand it fully requires a little bit of thinking. The Henry George School can help, and we invite you to investigate what we offer. Some of our relevant links are below.

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